Construction of homes, offices and factories in China fell at least 16.6% in October after rising 32.5% a year earlier.
Building is the biggest driver of China’s expansion, contributing a quarter of fixed- asset investment and employing 77 million people.
The central bank has cut its key interest rate by the most in 11 years and the government said ‘forceful’ measures were needed to arrest a faster-than-expected economic decline. Without more rate cuts and government spending, China is unlikely to contribute the 60% of global growth Merrill Lynch & Co. forecasts for next year.
In 2005, China vaulted past the U.K. to become the world’s fourth-largest economy, after expansion averaged 9.9% annually for the previous 30 years. GDP has increased 69-fold since Deng Xiaoping began free market changes in 1978. China accounted for 27% of global growth last year.
The World Bank last week cut its forecast for China’s expansion next year to 7.5% (the slowest in almost two decades) from 9.2% in the previous quarterly report, saying the country could no longer rely on overseas consumers.
Louis Kuijs, a senior economist at the World Bank in Beijing, said, ‘The real estate sector has seen a particularly pronounced slowdown. Real estate investment growth is now close to zero.’
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